MY proposal to return important fiscal powers to councils – removed by Margaret Thatcher before the Scottish Parliament existed – has proved contentious among the big businesses that lobby government.

The way we tax business properties in Scotland is complex and archaic. Properties that are not homes – from hairdressers to Amazon warehouses – are officially valued every few years and given a rental value.

The businesses, charities, schools, community groups or other organisations occupying those properties pay a percentage of that rental value to the local authority each year. How much they pay is decided not by their local councillors, or even by Parliament, but by Scottish ministers.

A complex system of rate reliefs has evolved to stimulate particular parts of the economy. The Small Business Bonus Scheme, for example, ensures that small businesses pay reduced rates or no rates at all. Bizarrely, this includes one of the richest men in the world, Sheikh bin Rashid Al-Maktoum, who pays no rates to Highland Council despite owning tens of thousands of acres of Scottish land.

Until Thatcher removed the power to set rates, non-domestic rates were a local tax used to fund local services. In the 1990s, Scottish Secretary Donald Dewar said returning non-domestic rates to the hands of local authorities should be considered once the Parliament had been established. Instead, then as now, vested business interests killed any hope of creating a modern Scottish taxation system.

Ex-councillors can remember debating the local rates in council meetings throughout the 1970s and 80s. If these rates were decided by councils today, their proceedings would be publicly accessible – perhaps streamed – and the minutes available online. Councils would be held accountable by local businesses for the local rate.

This would erode the ability of industry bodies to lobby en masse at Westminster and Holyrood.

The “uniform business rate” is beloved of big business in part because it closely tracks whatever is set in Westminster. This consistency with England has two effects: most obviously, it simplifies bills for companies operating on both sides of the border. It also means large businesses can concentrate their lobbying efforts on the centre. They do not need to engage with local government.

If Westminster decreed that from tomorrow Scottish taxation rates would be set in London, there would be an outcry from the SNP. And yet this is exactly what happens with non-domestic rates in the interests of big business.

In 2015, councils were given limited powers to introduce local reliefs, lowering rates for some businesses. Those councils that could afford to do so have introduced targeted reliefs to stimulate local economies, even though any loss of income must be funded from their wider budget.

Without the power to also increase rates, it is difficult for administrations to use the power. Local authorities need full flexibility.

Local authorities across Europe set their own tax rates on commercial property. Industry bodies in other countries accept that commercial property taxation is a local tax used to support local services. In Denmark and Finland – countries of a very similar size to Scotland – the local authorities set local rates.

If Scotland wants to be a modern European country, it needs to reform its obsolete tax regime.

In New Zealand – another similar-sized country that Scotland often looks to – local authorities not only decide the level of rates paid on properties, but also agree with their communities what the basis of valuation should be.

If you own a shop on Inverness High Street, the level of tax you pay to Highland Council is decided by the Scottish Government – which has chosen for some time to mirror the rates set by the UK Government. You have no right to inform or challenge the process.

The absurdity of this situation was thrown into stark relief in Aberdeenshire in 2017 when falling oil prices meant a rise in non-domestic rates – based on out-of-date official property valuations – would have decimated some businesses. The Scottish Government had to introduce a cap on rate rises for offices and the hospitality sector in Aberdeen and Aberdeenshire.

The Non-Domestic Rates Bill currently before the Scottish Parliament is a unique opportunity to return control of non-domestic rates to councils. It is the first piece of non-domestic rates legislation that the Parliament has dealt with since devolution.

The Scottish Government promised a “thorough and comprehensive review of the whole business rates system”. Instead, we got the Barclay Review which looked only at the impact on business and asked just one question. We cannot create a modern tax system if we do not address the centralised and archaic nature of our current regime.

That is why I amended the bill asking Scottish ministers to commit to returning rates to local councils. If this amendment falls, it is because business interests have yet again won out over the needs of communities.

If Scotland wants to become a normal European country, independence is not enough. We also need to reform the weakest and most centralised system of local government in Europe.